Is crypto dead? It’s a fair question, 2022 was another tough year for this still nascent industry. The crypto market lost over $2 trillion and Bitcoin over 60% of its value. There were more than a few crypto collapses last year, including industry golden child Sam Bankman-Fried’s FTX which left between $1 billion to $10 billion owed to creditors. It’s not all doom and gloom though, Bitcoin’s price recently surged over $26,000 for the first time since the summer of 2022. And, how you see crypto really depends on where in this sphere you are looking.
Let’s separate out the cryptocurrencies, investing, and trading opportunities that birthed the sector from the underlying technology of blockchain. And, further, differentiate today’s emerging iterations such as NFTs and metaverse technologies. We can see each of these cryptocurrency evolutions and applications differently, and they are performing quite apart from one another.
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Cryptocurrencies and Exchanges
Is Bitcoin dead? No, it’s volatile, that’s the nature of the beast. Bitcoin and similar cryptocurrencies are decentralised and unregulated by central banks, their price is determined by market moves, supply and demand, and investor sentiment. Are crypto exchanges dead? Some of them are for sure like FTX and BlockFi in 2022. The industry also lost cryptocurrency investment firm Voyager Digital and hedge fund Three Arrows Capital (3AC) and that’s to name just a few, in one year.
Is crypto dead then? No, crypto is evolving still and for a variety of reasons it’s shedding some of its players and indeed coins along the way. According to CNBC’s All-America Economic Survey, only 8% of Americans have a positive view of cryptocurrency.
But, off the back of new inflation data and a weekend where a more conventional bank, Silicon Valley (SVB) bit the dust, Bitcoin made its best recovery for nine months.
PwC’s overview of cryptocurrency evolution describes it as a “new phase of technology-driven markets,” that have the potential to “disrupt,” and says that cryptocurrencies carry “groundbreaking potential.” The article adds that the discussion is not one of “whether cryptocurrency will survive, but rather how it will evolve—and when it will reach maturity.”
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The underlying distributed ledger technologies, or blockchain networks, that began by powering cryptocurrencies can be viewed very differently without the lens of price volatility and exchange collapses.
The potential of blockchain was so massive that almost immediately large companies and even central banks began investigating its application to improve processes, track the movement of shipments and products, and to enable the exchange of money and for central bank digital currencies (CBDCs). Progress is slow for these major projects and some have been mothballed for sure, but blockchain is not dead.
NFTs and Metaverse Projects
So, cryptocurrencies are not yet “mainstream,” in that most people aren’t using them day to day.
How do they become “mainstream,” and solidified into everyday culture? The answer is use.
Arguably, the easier converts to users are the globe’s 3 billion active gamers, predominantly Millennials and Gen Z, and our digital generations.
NFT and blockchain metaverse projects are somewhat detached from original cryptocurrencies like Bitcoin, but they use similar technology. Because NFTs are most often sold or traded on exchanges like crypto.com, and because you need a digital wallet to store NFTs, users are actually transacting in the cryptocurrency space.
Thus far, metaverse projects and cryptocurrencies are intrinsically linked. The leading projects, including Decentraland, The Sandbox, Axie Infinity, and ApeCoin all have NFTs or native coins.
Metaverse projects that don’t have crypto origins are still in their infancy. Facebook is developing Meta and there is Microsoft Mesh. How we’ll eventually transact in these spaces isn’t completely clear. Just days ago, Facebook announced it was pulling support for NFTs on Instagram and Facebook. A move which NFT artist Dave Krugman and others say is “short-sighted.” Interestingly, Meta Pay is Facebook’s answer to transacting in its metaverse and plans from last year did indicate it could support cryptocurrency.
Do the latest developments mean that crypto is dead for Meta? We don’t know. However, the future of entertainment will, for sure, be a connected and overlapping sphere of movies, gaming, esports, esports betting, crypto betting, virtual worlds and augmented reality and much much more.
If blockchain gaming and metaverse projects hit mainstream, then non-crypto metaverse projects might have to provide some form of crypto crossover to achieve the seamless interoperability we are promised by this digital age.